News Analysis: Installations crater in Hawaii after incentives gutted

In 2015, Hawaii’s Public Utilities Commission eliminated the state’s net-metering incentive. Since then, the number of permits pulled on Oahu for solar installations has plummeted, reaching a new low in 2017 of only 449.

Share

A note to all states that have already eliminated – or are planning to eliminate – precipitously the net-metering policies that have boosted the industry in your states. Heed the hard lessons from Hawaii, which once served as a shining solar light but has now become a cautionary tale.

On the island of Oahu, the number of solar permits has fallen to an all-time low – 449 – and the number of systems that have come online in the first quarter are down 37% from 2016. Are you paying attention, Indiana? How about you, Missouri? Arizona? Maine? Iowa?

The elimination of net-metering in 2015 in the second quarter of that year has brought on a steady decline that started slowly but is continuing to gather steam as the program fades to a distant memory. According to data compiled by pv magazine‘sAmericas Editor Christian Roselund since the net-metering decision, the news has not been good for the Oahu market:

Q3 15: 578

Q4 15: 576

Q1 16: 554

Q2 16: 493

Q3 16: 489

Q4 16: 468

Q1 17: 449

Ironically, at the same time net-metering disappeared, the Hawaii legislature unveiled a new goal for the state: The law requires the state to be 100% powered by renewable energy by 2045 – a goal made more difficult to reach without the robust net-metering program on whose provisions the Hawaii market had exploded.

Unfortunately, that program also became oversubscribed and hit its cap in August, and the Hawaiian Public Utilities Commission (PUC) refused to raise it at the time. Recently, however, the PUC decided to move more capacity to the CGS program, in a concession to the reality that the sudden elimination of net-metering had caused too much disruption to the market. For that realization, the solar industry is grateful.

The successor program to the CGS program was the Customer Self-Supply (CSS) program, which is designed for distributed PV installations that don’t export any electricity to the grid. Under CSS, customers are not compensated for excess energy as they were under the old net-metering programs.

Until November 2016, when the utility received 234 applications for the program, it had struggled to gain traction in a state where 15% of all residential and commercial electric customers have PV systems — nearly 20 times the national average- and approximately 29 percent of all single family homes have been approved to install a PV system.

“Hawaii is in the midst of a challenging transition,” said Robert Harris, director of public policy at residential installer Sunrun. “No industry can change overnight, and the solar industry is no exception.”

Sunrun has steadily increased its marketshare in Hawaii, selling more than 1,000 of its BrightBox solar+storage solutions since April 2016. The company believes the solar+storage solution could offer a way forward to satisfy a populace thirsting for ever-increasing amounts of solar power while preventing the utilities and grid from being overwhelmed.

“Sunrun has been proposing new tariffs that move the market toward a long-term distributed-energy resources market structure,” Harris said. “We are encouraged by the PUC’s work in developing new, innovative solutions to keep the solar market in the state vibrant and viable.”

“Our Hawaiian customers are eager to take advantage of innovative solar solutions that achieve Hawaii’s 100% clean-energy goals as well as the financial benefits of adding solar as well,” Harris added.

In fact, two new bills are making their way through the Hawaii legislature that could help Sunrun’s vision move forward. First, House Bill 1593 would expand the Green Energy Market Securitization (GEMS) program, which would essentially create a rebate for people who install storage systems.

The second bill, Senate Bill665, would provide tax credits for both traditional grid-connected solar systems and energy-storage systems while tamping down – slowly – the current tax incentive programs.

Until those programs are enacted or other solutions are found, evidence of a Hawaiian market slowing to a near standstill remains. And while optimism among installers on the islands is often hard to come by, the Hawaiian Solar Energy Association (HSEA) holds out hope that the market will turn around.

“With the recent, positive PUC ruling adding CGS program capacity and two energy storage incentive bills in legislation there is a reason for optimism,” said Hajime Alabanza, executive assistant to HSEA. “Through reasoned regulatory action and legislative support for renewable energy and storage, the benefits of solar can reach all residents of the state.”

Share

Frank Andorka

Frank Andorka has been writing professionally for nearly 29 years and spent nearly 20 years in trade publications. He was the founding editor of Solar Power World and has covered all aspects of the solar industry from policy to panels and everything in between.

Your email address will not be published. Required fields are marked *

Comment

Name *

Email *

Website

Notify me of follow-up comments by email.

Notify me of new posts by email.

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Keep up to date

pv magazine USA offers daily updates of the latest photovoltaics news. We also offer comprehensive global coverage of the most important solar markets worldwide. Select one or more editions for targeted, up to date information delivered straight to your inbox.

Email*

Select Edition(s)*

Hold Ctrl or Cmd to select multiple editions.

We send newsletters with the approximate frequency outlined for each edition above, with occasional additional notifications about events and webinars. We measure how often our emails are opened, and which links our readers click. To provide a secure and reliable service, we send our email with MailChimp, which means we store email addresses and analytical data on their servers. You can opt out of our newsletters at any time by clicking the unsubscribe link in the footer of every mail. For more information please see our Data Protection Policy.

Keep up to date

We send newsletters with the approximate frequency outlined for each edition above, with occasional additional notifications about events and webinars. We measure how often our emails are opened, and which links our readers click. To provide a secure and reliable service, we send our email with MailChimp, which means we store email addresses and analytical data on their servers. You can opt out of our newsletters at any time by clicking the unsubscribe link in the footer of every mail. For more information please see our Data Protection Policy.

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.